Health Expenditures-Economic Growth Nexus: The EU 28 And Panel Feder-Ram Model

Authors : Nilgün SERİM, Serdar KURT

Pages : 184-193

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Publication Date : 2018-12-30

Article Type : Research Paper

Abstract :This study uses the dynamic panel data Feder-Ram model to analyze possible direct and indirect (external or productivity enhancer) effects of the health expenditures on economic growth for 28 European Union Countries period of 2006-2015. The main findings obtained from the study; The Feder-Ram equations show that the direct effect of healthcare expenditures on economic growth is negative and statistically significant. However, the indirect effect of healthcare expenditures on other sectors are positive and significant. The healthcare expenditures increase the productivity of labour factor and thus, the efficiency on other sectors and consequently, healthcare expenditures provide a positive contribution to production. Results obtained from the equations have shown that indirect effect is higher than direct effect. As a result, it can be smoothly said that the net effect of healthcare expenditures is positive. 
Keywords : Direct and Indirect Effects, Health Expenditures, Economic Growth, The FederRam Model